Question

In: Finance

The JLK Corporation is considering an investment that will cost RM80,000 and have a useful life...

The JLK Corporation is considering an investment that will cost RM80,000 and
have a useful life of 4 years. During the first 2 years, the net incremental after-tax
cash flows are RM25,000 per year and for the last two years they are RM20,000
per year. Calculate the payback period for this investment.

Solutions

Expert Solution


Related Solutions

A company is considering an investment that will cost $743,000 and have a useful life of...
A company is considering an investment that will cost $743,000 and have a useful life of 8 years. The cash flows from the project are expected to be $410,000 per year in the first two years then $142,000 per year for the last 6 years. If the appropriate discount rate is 12.7 percent per annum, what is the NPV of this investment (to the nearest dollar)? Select one: a. $394283 b. $1880283 c. $384492 d. $516026
A company is considering an investment that will cost $744,000 and have a useful life of...
A company is considering an investment that will cost $744,000 and have a useful life of 8 years. The cash flows from the project are expected to be $512,000 per year in the first two years then $108,000 per year for the last 6 years. If the appropriate discount rate is 15.0 percent per annum, what is the NPV of this investment (to the nearest dollar)? Select one: a. $397417 b. $1885417 c. $415178 d. $497087
Company XYZ is considering an investment of $100,000. The useful life of the project is 10...
Company XYZ is considering an investment of $100,000. The useful life of the project is 10 years. The cut off period is three (3) years. The board of the directors has identified two alternatives A and B. The expected annual cash flows are as follows: Cost of Cash Flow Alternative A Alternative B Initial Cost ($100,000) ($100,000) Cash Flow Year 1 35000 35000 Cash Flow Year 2 28000 35000 Cash Flow Year 3 32000 35000 Cash Flow Year 4 40000...
The cost to purchase “New Tech” will be $421,000 and will have a useful life of...
The cost to purchase “New Tech” will be $421,000 and will have a useful life of 6 years; “New Tech” will have a salvage value of $26,000 at the end of 6 years. The cost to purchase “Standard Classic” will be $235,000 and will also have a useful life of 6 years; “Standard Classic” will have a salvage value of $5,000 at the end of 6 years. Total Contribution Margin from the sale of Widgets will be different for each...
A firm is considering investing $42,000 in equipment that is expected to have a useful life...
A firm is considering investing $42,000 in equipment that is expected to have a useful life of four years and is expected to reduce (save) the firm’s labor costs by $8,900 per year. The equipment can be sold for $18,000 at the end of the period. Assume the firm pays a 40% income tax rate on its taxable income and uses the declining balance (200%) depreciation method. The firm’s after tax MARR is 5% per year. What are the after-tax...
A firm is considering the following investment project. Theproject has a 5-year useful life with...
A firm is considering the following investment project. The project has a 5-year useful life with a $125000 salvage value as shown. Straight-line depreciation will be used. Assume the income tax rate of 34%. What is the after-tax rate of return on this capital expenditure?  
Jark Corporation has invested in a machine that cost $75,000, that has a useful life of...
Jark Corporation has invested in a machine that cost $75,000, that has a useful life of six years, and that has no salvage value at the end of its useful life. The machine is being depreciated by the straight-line method, based on its useful life. It will have a payback period of four years. Given these data, the simple rate of return on the machine is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Garrison 16e...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $ 164,800 $ 180,250 $ 204,000 Annual net income: Year  1 14,420 18,540 27,810         2 14,420 17,510 23,690         3 14,420 16,480 21,630         4 14,420 12,360 13,390         5 14,420 9,270 12,360 Total $ 72,100 $ 74,160 $ 98,880 Depreciation is computed by the straight-line method with no salvage...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. I got all the answers by my computation for average rate of return Is wrong Project Bono Project Edge Project Clayton Capital investment $164,800 $180,250 $206,000 Annual net income: Year  1 14,420 18,540 27,810         2 14,420 17,510 23,690         3 14,420 16,480 21,630         4 14,420 12,360 13,390         5 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation...
Henkel Company is considering three long-term capital investment proposals. Each investment has a useful life of...
Henkel Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Kilo Project Lima Project Oscar Capital investment $165,850 $176,550 $200,850 Annual net income:     Year 1 13,910 18,725 29,425 2 13,910 17,655 24,075 3 13,910 16,585 23,005 4 13,910 12,305 14,445 5 13,910 9,095 13,375 Total $69,550 $74,365 $104,325 Depreciation is computed by the straight-line method with no salvage value. The company’s cost...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT